Serra Chevrolet Inc v. General Motors LLC

On December 19, 2025, Serra Chevrolet Inc., a long-standing Michigan dealership, filed suit against General Motors LLC in federal court. The complaint alleged that GM violated the federal Automobile Dealer’s Day in Court Act and Michigan’s franchise laws by coercing dealers into its Electric Vehicle (EV) enrollment program. GM demanded that Serra invest over $500,000 in on-site charging infrastructure and accept mandatory allocations of electric models or face franchise termination. Serra argued this constituted an unlawful modification of their existing dealer agreement without good cause, breaching the implied covenant of good faith and fair dealing. GM countered that the program was essential for brand competitiveness and that all similarly situated dealers were required to participate. The case quickly became a bellwether for dealer-manufacturer disputes amid the industry’s electrification push.

The court granted Serra Chevrolet’s motion for a preliminary injunction, barring GM from terminating or non-renewing the franchise pending a full trial. The ruling found a substantial likelihood that GM’s all-or-nothing EV enrollment demand constituted a coercive and unfair practice under Michigan’s Motor Vehicle Franchise Act, preserving the dealer’s right to operate under its existing agreement without retaliation.

Whether an automobile manufacturer may unilaterally compel a franchised dealer to make substantial capital investments in electric vehicle infrastructure and accept mandatory EV inventory allocations under threat of franchise termination, and whether such actions violate state dealer protection statutes and the contractual duty of good faith.

The decision sent shockwaves through the U.S. automotive retail sector. It emboldened dealer associations in multiple states to challenge manufacturer EV mandates and influenced several automakers to adopt more flexible, incentive-based enrollment frameworks. The case accelerated legislative efforts to update franchise laws for the electrification era and underscored the judiciary’s role in balancing innovation against contractual fairness in legacy distribution networks.